SEJONG, SOUTH KOREA / RankWire.AI / – South Korea’s consumer inflation for August reached 3.1% from the same month last year, according to official figures. This marks an increase from 2.8% in July and indicates a return above the 3% threshold. Additionally, consumer prices experienced a 0.2% rise compared to July. The Ministry of Data and Statistics reported the consumer price index at 120.05, using a 2020 benchmark of 100. Much of the yearly rise was fueled by increased costs for fuel and mobile services.
Petroleum prices surged 14.2% compared to August 2025, adding pressure to household transportation expenses. Diesel prices went up by 19.6%, with gasoline prices rising 11.5%. Petroleum products contributed 0.54 percentage points to the annual inflation figure. Overall, transportation costs increased 7.2% year-on-year. The government stated that nationwide fuel price caps reduced August inflation by approximately 0.3 percentage points, partly offsetting the impact of rising energy prices.
Communication expenses also saw a sharp rise, partly due to a low comparison base from the previous year. Mobile phone service charges jumped 26.7% from August 2025. SK Telecom had offered significant one-month discounts following a data breach during the same period last year. The government estimated that without the mobile service effect, annual inflation would have been around 2.5%. Overall, communication prices increased by 16.6%, making this category one of the largest contributors to the annual increase in the consumer basket.
Rising fuel and communication costs contribute to overall price hikes
Price growth pressures intensified alongside the headline inflation rate. Core inflation, excluding food and energy, rose 3.4% from a year earlier, the strongest increase since May 2023. Another measure that excludes agricultural and petroleum products grew by 3.1%. The index for essential living expenses, which tracks common household purchases, increased by 3.2%. Within this measure, food prices saw a 0.8% rise, while nonfood prices climbed 4.8% year-on-year.
Broad increases were also observed in industrial goods and services in August. Industrial product prices rose 3.7%, with service costs increasing by the same margin. Electricity, gas, and water expenses went up 0.4% from the previous year. Insurance premiums increased by 13.4%, and overseas package tour prices rose 14.9%. Restaurant and accommodation costs went up 2.8%. Expenses related to recreation and culture also grew by 4.9%, contributing to the overall rise in service-related expenditures.
Fresh produce prices decline amidst overall inflation
During the month, prices for agricultural, livestock, and fishery products showed some relief, decreasing by 2.6% compared to last year. Fresh food prices fell 6.7%, mainly driven by drops in vegetables and fruits. Vegetable prices declined 9.8%, while fresh fruit prices decreased 10%. Conversely, fresh fish and seafood prices increased by 4.1%. Imported beef prices went up 6.2%, and domestic beef prices rose 3.3% over the same period.
The August data indicates that inflation remains uneven across key household spending categories. Costs for housing, water, electricity, and fuel rose 1.9% from the previous year. Food prices were relatively subdued as fresh produce became cheaper, but energy, communication, and various service sectors experienced larger gains. The 3.1% headline inflation rate reflects these contrasting trends within the consumer basket. The latest figures also highlight that temporary mobile pricing effects and higher petroleum costs significantly contributed to South Korea’s annual inflation increase.